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CONSUMPTION RESPONSE TO GOVERNMENT TRANSFERS: BEHAVIORAL MOTIVES REVEALED BY SAVERS AND SPENDERS
Author(s) -
WONG WEIKANG
Publication year - 2012
Publication title -
contemporary economic policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.454
H-Index - 49
eISSN - 1465-7287
pISSN - 1074-3529
DOI - 10.1111/j.1465-7287.2011.00276.x
Subject(s) - bequest , consumption (sociology) , economics , ricardian equivalence , liquidity constraint , market liquidity , consumption smoothing , leverage (statistics) , government (linguistics) , microeconomics , constraint (computer aided design) , monetary economics , public economics , economic growth , fiscal policy , mechanical engineering , social science , linguistics , philosophy , engineering , sociology , political science , law , unemployment , machine learning , computer science
This article surveyed recipients of one‐off government transfers in Singapore to investigate to what extent different behavioral motives might have affected their consumption response. It also investigates how the recipients' personal characteristics might have affected their consumption response and the appeal of different motives. In the sample surveyed, savers were mostly motivated by precautionary saving, followed by Ricardian equivalence, whereas spenders were mainly driven by rule of thumb and present bias. The bequest motive turned out to be unimportant. Older, better educated, and economically better‐off individuals facing no liquidity constraint were more likely to be savers. ( JEL D91, E21, E62, H31)